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HomeMy WebLinkAbout2025-4634 - Ordinance - 10/09/2025ORDINANCE NO. 2025-4634 AN ORDINANCE AMENDING CHAPTER 2, "ADMINISTRATION," ARTICLE V. "FINANCE," DIVISION ONE "GENERALLY," SECTION 2-95, OF THE CODE OF ORDINANCES OF THE CITY OF COLLEGE STATION, TEXAS, BY AMENDING CERTAIN SECTIONS RELATING TO THE AUDIT COMMITTEE; PROVIDING A SEVERABILITY CLAUSE; DECLARING A PENALTY; AND PROVIDING AN EFFECTIVE DATE. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF COLLEGE STATION, TEXAS: PART 1: That Chapter 2, "Administration," Article V, "Finance," Division One "Generally," Section 2-95 of the Code of Ordinances of the City of College Station, Texas, be amended as set out in Exhibit "A" attached hereto and made a part of this Ordinance for all purposes. PART 2: If any provision of this Ordinance or its application to any person or circumstances is held invalid or unconstitutional, the invalidity or unconstitutionality does not affect other provisions or application of this Ordinance or the Code of Ordinances of the City of College Station, Texas, that can be given effect without the invalid or unconstitutional provision or application, and to this end the provisions of this Ordinance are severable. PART 3: That any person, corporation, organization, government, governmental subdivision or agency, business trust, estate, trust, partnership, association and any other legal entity violating any of the provisions of this Ordinance shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punishable by a fine of not less than twenty five dollars ($25.00) and not more than five hundred dollars ($500.00) or more than two thousand dollars ($2,000) for a violation of fire safety, zoning, or public health and sanitation ordinances, other than the dumping of refuse. Each day such violation shall continue or be permitted to continue, shall be deemed a separate offense. PART 4: This Ordinance is a penal ordinance and becomes effective ten (10) days after its date of passage by the City Council, as provided by City of College Station Charter Section 35. Ordinance No. 2025-4634 Page 2 of 7 PASSED, ADOPTED and APPROVED this 9th day of October ATTEST: City Secretary APPROVED: 4n0. e i� City Attorney APP. Mayor , 2025. Ordinance No. 2025-4634 Page 3 of 7 EXHIBIT A That Chapter 2, "Administration," Article V, "Finance," Division One "Generally," Section 2-95 of the Code of Ordinances of the City of College Station, Texas, is hereby amended as follows: Sec. 2-95. - Creation of an Audit Committee. A standing committee to be known as the Audit Committee is hereby created. (1) Purpose. To ensure independence of the audit function, an Audit Committee is hereby established for the purpose of assisting the City Council in fulfilling their governance and oversight responsibility. (2) Definitions. For the purposes of this section, the following terms shall have the meanings ascribed to them below: a. City Internal Auditor means the officer appointed by the City Council responsible for carrying out the internal audit function. The City Internal Auditor is the Chief Audit Executive (CAE) for the City of College Station. b. Internal Audit Function means the independent audit activity, whether performed by City staff or contracted professionals, that provides assurance and advisory services to evaluate and improve the effectiveness of governance, risk management, and internal control processes. c. Audit Charter means a formal document that defines the internal audit function's purpose, authority, and responsibility. d. Audit Plan means a risk -based plan developed annually by the City Internal Auditor and approved by the Audit Committee that outlines the audits and related activities to be performed. e. Global Internal Audit Standards means the mandatory elements of the Institute of Internal Auditors' (IIA) International Professional Practices Framework, as adopted and revised by the IIA, which guide the practice of internal auditing. f. Topical Requirements means the mandatory components of the IIA's Global Internal Audit Standards which provide detailed, subject -specific guidance for internal auditors and must be followed only when the topic is relevant to the audit engagement. g. External Audit means an audit conducted by independent certified public accountants or qualified professionals who are not employed by the City. h. Annual Comprehensive Financial Report (ACFR) means a set of financial statements prepared annually by the City's Fiscal Services Department in accordance Ordinance No. 2025-4634 Page 4 of 7 with generally accepted accounting principles (GAAP) as promulgated by the Governmental Accounting Standards Board (GASB). The ACFR is independently audited by a certified public accounting (CPA) firm each fiscal year. i. Single Audit means an audit required under the federal Single Audit Act and 2 CFR Part 200, Subpart F (Uniform Guidance) to ensure accountability for the expenditure of federal funds. The Single Audit is conducted annually by an independent CPA firm in accordance with Generally Accepted Government Auditing Standards (GAGAS) and Uniform Guidance, and provides assurance that the City is complying with applicable federal program requirements. (3) Membership and term. a. Membership. The Audit Committee consists of the Mayor, two (2) City Council members and two (2) citizen members with backgrounds in accounting, finance or auditing. The Mayor serves as Chair. The City Council committee members are appointed and serve until the earlier of the expiration of their term on the City Council or until their successors are appointed. Vacancies are filled by the City Council for the unexpired terms of any member whose term becomes vacant. Citizen members are appointed for two-year terms or until their successors are appointed. b. Quorum. Three members constitute a quorum for transaction of business. Any recommendation or decision which does not receive a majority of positive votes shall be deemed a negative report. c. Minutes. The Audit Committee shall keep minutes of its proceedings, showing the vote, indicating such fact, and shall keep records of its examinations and other official actions, all of which shall be public record. (4) Meetings, duties, and responsibilities. The Audit Committee meets as needed to perform its duties, but must meet at least once a quarter. The duties and responsibilities of the Audit Committee include those as listed below. The Audit Committee shall also carry out other duties and responsibilities as may be assigned by the City Council. a. Discuss with the City Internal Auditor and senior management the appropriate authority, role, responsibilities, scope, and services including assurance and advisory services of the internal audit function. b. Participate in discussions with the City Internal Auditor and senior management about the "essential conditions," described in the Global Internal Audit Standards, which establish the foundation that enables an effective internal audit function. c. Approve the internal audit function's charter, which includes the internal audit mandate and the scope and types of internal audit services. Ordinance No. 2025-4634 Page 5 of 7 d. Review the internal audit charter as needed with the City Internal Auditor to consider changes affecting the organization, such as changes in the type, severity, and interdependencies of risks to the organization; and approve the internal audit charter. e. Approve the risk -based internal audit plan. f. Provide input and review to the internal audit function's expenses, human resources administration, and budgets. The Audit Committee may recommend to senior management, which submits budgetary requests to the City Council, for sufficient budget and resources allowing the internal audit function to fulfill its mandate and accomplish its audit plan. g. Review and provide input to the City Council and senior management on the City Internal Auditor's performance. h. Receive communications from the City Internal Auditor about the internal audit function including its performance relative to its plan. i. Ensure a quality assurance and improvement program is established and review the results annually. j. Make appropriate inquiries of senior management and the City Internal Auditor to determine whether scope or resource limitations are appropriate. (5) Audit function, scope, and oversight. The City Council directs the Audit Committee to oversee the City Internal Auditor's financial and performance audits of all departments, offices, boards, activities, outside agencies and programs of the City. Such audits shall be conducted in conformance with the mandatory elements of the Institute of Internal Auditors' International Professional Practices Framework, which are the Global Internal Audit Standards and Topical Requirements. The goals of such audits are to independently and objectively determine whether: a. Activities and programs being implemented have been authorized by government Charter or Code, State law or applicable Federal law or regulations, and are being conducted and funds expended in compliance with applicable laws; b. The department, office, or outside agency is acquiring, managing, protecting, and using its resources, including public funds, personnel, property, equipment, and space, economically, efficiently, equitably, and effectively and in a manner consistent with the objectives intended by the authorizing entity or enabling legislation; c. The entity, programs, activities, functions, or policies are effective, including the identification of any causes of inefficiencies or uneconomical practices; d. The desired result or benefits are being achieved; Ordinance No. 2025-4634 Page 6 of 7 e. Financial and other reports are being provided that disclose fairly, accurately, and fully all information required by law, to ascertain the nature and scope of programs and activities, and to establish a proper basis for evaluating the programs and activities, including the collection of, accounting for, and depositing of revenues and other resources; f. Management has established adequate operating and administrative procedures and practices, systems or accounting internal control systems and internal management controls; g. Indications of fraud, abuse or illegal acts are valid and need further investigation; and h. Any additional audit -related goals as assigned by the City Council. (6) Audit schedule. The Audit Committee shall review, comment, and approve the annual City Internal Auditor's annual audit plan. The proposed plan for consideration may include the rationale for the proposed selections, for auditing departments, offices, boards, activities, subcontractors and outside agencies for the period. Once approved, the plan may be amended after review with the Audit Committee or City Council. (7) Contract auditors, consultants, and experts. Subject to City Council approval, the Audit Committee may direct the City Internal Auditor to obtain the services of CPA firms, qualified management consultants, or other professional experts necessary to perform internal audit work. A contracted audit must be conducted by persons having no financial interests in the affairs of the City or its officers. As directed by the Audit Committee, the City Internal Auditor will coordinate and monitor auditing performed by CPA firms or other organizations employed under contract by the City to assist with internal audit related activities. (8) Annual internal audit report. The Audit Committee may require the City Internal Auditor to prepare and submit an annual report to the City Council indicating audits completed, major findings, corrective actions taken by administrative managers, and significant issues which have not been fully addressed by management. The annual report may also include a summary of the internal audit function's conformance with applicable auditing standards, as assessed through the internal audit office's quality assurance and improvement program. If applicable, the annual report shall disclose any impairments to the City Internal Auditor's independence or objectivity. (9) External Audit. The Audit Committee at City Council's direction provides oversight of the external financial audit process, including the Annual Comprehensive Financial Report and, when applicable, the Single Audit. The Audit Committee shall participate in and provide guidance on the selection of an independent CPA firm to conduct these audits. The selected CPA firm shall conduct its audit in accordance with applicable professional standards, including GAAP, Generally Accepted Auditing Standards (GAAS), GAGAS, and the Uniform Guidance for federal awards. The Audit Committee shall receive the results of all external audit reports, including management letters and findings, and shall meet with the external auditors to review the results, discuss any Ordinance No. 2025-4634 Page 7 of 7 significant issues or recommendations, and monitor the City's response and corrective actions as necessary. Contracting with a CPA firm to provide these services will follow the City's normal contracting processes except for the participation and oversight by the Audit Committee.